Cryptocurrency Exchanges and The Need For Greater Transparency
The US Securities and Exchange Commission (SEC) recently rejected nine Bitcoin Exchange-Traded Funds (ETFs) which had been proposed by ProShares, Direxion, and GraniteShares. The reason cited for the the rejection is on the same lines as before - the scope for manipulative and fraudulent practices.
"The Commission is disapproving this proposed rule change because, as discussed below, the Exchange has not met its burden under the Exchange Act and the Commission's Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that a national securities exchange's rules be designed to prevent fraudulent and manipulative acts and practices."
"70% of the top 100 exchanges, which include BiBox, Bit-Z, ZB, LBank, BCEX, etc, have been faking over two-thirds of their 24-hour trading volume, which consists of over $6 Bn."
This rejections have come barely a month after the rejection of the Bitcoin ETF from Winklevoss brothers, which was disapproved because of the SEC's concerns about security and investor protection.
The concerns of the SEC are valid, as there have been several instances of price manipulation and misinformation on cryptocurrency exchanges in the recent past. Recently, Bitcoin saw a sudden $400 price spike, which coincided with BitMEX's temporary downtime, and in which several investors in short positions got liquidated. BitMEX is being suspected of having been involved in pumping Bitcoin during that time to gain profits.
In another report, it has been revealed that several exchanges have also been engaging in wash trading. 70% of the top 100 exchanges, which include BiBox, Bit-Z, ZB, LBank, BCEX, etc, have been faking over two-thirds of their 24-hour trading volume, which consists of over $6 Bn.
In the light of the recent events, which highlight the fact that the SEC's concerns about investor security and transparency are valid, it may become quite difficult for the cryptocurrency industry to gain the trust of institutional investors, and for the SEC to approve Bitcoin ETFs. Cryptocurrency experts such as CNBC's Brian Kelly is of the view that the cryptocurrency markets needs to mature in order for the SEC to consider approving Bitcoin ETFs.
"Bittoria belongs to that class of cryptocurrency platforms which are all for having a regulated environment conducive to the growth of cryptocurrencies."
The cryptocurrency industry, at the moment, lacks tools to monitor the transparency of operations and ensure investor protection. In that case, the onus of taking all necessary measures to prevent price manipulation and ensure investor protection falls on cryptocurrency platforms, if they want to see a future where cryptocurrencies gain wider adoption and become mainstream investment products.
Bittoria belongs to that class of cryptocurrency platforms which are all for having a regulated environment conducive to the growth of cryptocurrencies. The exchange has been founded on the principles of transparency, and it believes in a consumer-first approach.
The exchange will undergo regular audits and share the audit reports with its stakeholders in a transparent and reliable manner. The Bittoria team is not only investing in robust infrastructure which will be resistant to all kinds of attacks, it is also going to ensure complete compliance with KYC/AML requirements.
More about the exchange will be revealed in the blogs to come. Stay tuned!